U.S. Department of Housing and Urban Development

Special Attention of NoticeCPD-08-03

All HOPWA Renewal Grantees Issued 02-28-08

All CPD Field Office Directors

Expires02/28/09

Cross References

24 CFR Part 574 -- Housing Opportunities for

Persons With AIDS (HOPWA)

Subject:

Standards for Fiscal Year 2008 HOPWA Permanent Supportive Housing Renewal Grant Applications

TABLE OF CONTENTS

(I) Purpose

(II) Background

(III) Eligibility for Permanent Supportive Housing Renewal Grant

(IV) Ineligible Competitive Grants

(V) Eligible Permanent Supportive Housing Activities

(VI) Ineligible Activities

(VII) Funding Restrictions

(VIII)Application Submission Requirements

(IX) Application Narratives

(X) Application Review and Approval Information

(XI) Application Submission

(XII) Information Collection Summary

I. Purpose

This Notice provides guidance for the renewal of Housing Opportunities for Persons With AIDS (HOPWA) Permanent Supportive Housing grants in Fiscal Year (FY) 2008 and updates and clarifies standards used in Community Planning and Development (CPD) Notice 07-13, Standards for Fiscal Year 2007 HOPWA Permanent Supportive Housing Renewal Grant Applications, issued on February 21, 2007, for FY2007 renewals. As established in section XI of this Notice, FY2008 renewal applications are due on April 30, 2008, (60 days after publication).

Distribution: W-3-1
Previous editions are obsolete form HUD-21-B (3/80)
II. Background

Pursuant to the Department’s FY2008 Appropriations Act, the Department is required to renew all expiring HOPWA competitive grants that provide permanent supportive housing (PSH) and meet program requirements. Under this Notice, the Department defines the process for approving renewal funding of PSH grants. The most significant step in the approval process is determining whether the primary activity of the expiring grant is PSH. HUD will consider the primary activity of the project as PSH when at least 51 percent of the grant funds are used to undertake program activities that provide PSH to eligible persons, including the direct housing costs and other related service costs. Permanent housing refers to housing in which the eligible person has a continuous legal right to remain in the unit, and supportive housing refers to activities that provide eligible persons with ongoing supportive services through qualified providers. HUD will renew previously funded competitive PSH grants that meet the program requirements specified below. Applications will be given a pass/fail threshold review for eligible activities and budget line funding requests. To assist in developing an approvable renewal request, grantees should review their current HUD approved budget and logic model for use as a guide in preparing the renewal application.

This renewal procedure seeks to simplify the approval process and expedite grant awards. In addition, this process enables a level of dialogue to negotiate an approvable request. Renewal grantees will be able to clarify discrepancies and any other concerns with the application and submit any identified missing elements in an application.

To support the development of an application, please provide the Office of HIV/AIDS Housing with a letter of your intent to apply either by fax at (202) 708-9313 or by email at promptly after receiving this Notice. Your email or faxed letter of intent should be signed by an authorized representative of the grantee and sent both to HUD Headquarters, Office of HIV/AIDS Housing and to the HUD field office for your area.

III.Eligibility for Permanent Supportive HousingRenewal Grant

Eligible Applicants and Project Sponsors

To be eligible for renewal, the project must provide PSH to eligible persons under an expiring HOPWA grant and meet the threshold requirements established under this Notice. In providing PSH grantees must maintain evidence that clients have a continuous legal right to remain in the unit and access to ongoing supportive services provided through qualified providers. Grant files must include a copy of the standard lease form or occupancy agreement used for residents of the project. The lease or occupancy agreement must be for a term of at least one year that is automatically renewable upon expiration, except on reasonable prior notice by either the tenant or the landlord. Failure to maintain project documentation of leases or occupancy agreements will constitute a grant default, which may result in grant sanctions.

Grants that have successfully demonstrated PSH efforts and expire on or between October 1, 2007, and March 30, 2009, are eligible for renewal under this Notice. If a grant agreement expired before October 1, 2007, the project is not eligible for renewal under this Notice. A new grant application may be submitted through the anticipated HOPWA FY2008 SuperNOFA competition, to be published in the Federal Register later in this fiscal year. If a grant agreement will expire after March 30, 2009, it is expected that renewal funding for your PSH grant will be addressed in a future HOPWA notice.

It is anticipated that the applications that are selected as eligible renewal projects based on this review will continue providing their approved program activities under a new grant agreement for an additional three years. The start date for the new grant agreement is expected to immediately follow the expiration date of the existing grant for continuity of service. If justified, an adjustment to these dates could be negotiated to shorten or lengthen an existing grant period.

In the case that a grant expires and balances under the existing grant agreement are expended prior to the anticipated renewal award announcement under this notice, arrangements for pre-award costs may be made through an agreement with HUD. Pre-award costs are allowable costs incurred prior to the beginning date of the renewal grant agreement directly pursuant to the expiration of funds available under the existing expiring/expired grant agreement. Such costs are made in anticipation of the new award where such costs are necessary to comply with the proposed delivery schedule or period of performance for continued activities. Pre-award costs are authorized by OMB Circulars A87 and A122, which are applicable to the HOPWA program under 24 CFR 574.605. Grantees are required to obtain written approval from HUD for incurring pre-award costs. Eligible costs under the new renewal award grant agreement may include an authorization for pre-award costs to support continuation of the approved renewal activities. Please note,those eligible renewal grantees requesting this authorization would be undertaking activities at their own risk until (and if) the new agreement is approved and funds obligated. HUD understands that potential renewal grantees need to plan for any possible gapsin accessing fundsin order to prevent any disruption of services to clients. HUD expects to work with applicants that meet the renewal eligibility standards of this notice to ensure that the program’s clients are supported.

To be eligible as a renewal grant, the existing HOPWA competitive project must be operating in a manner that meets program requirements and is in compliance with the HOPWA regulations found at 24 CFR part 574. This is demonstrated by having a record of solid grant performance and no existing unresolved grant management issues. HUD will also consider any evidence of poor performance up to the date of the public announcement of awards under this Notice. Examples of poor performance include: a significant delay in program implementation; a significant number of vacant planned housing units; untimely filing and inaccurate and/or incomplete annual performance reports with HUD; unresolved actions pending under a HUD Notice of default on a current grant; or significant citizen complaints, which have not been addressed with justified reasons and remain unresolved. Further evidence of weak performance may be found if expenditures of the existing grant funds are not appropriately drawn down over the three year grant period leaving a large unexpended balance at the time of the existing grant’s expiration date, or expending the existing grant funding prior to the expiration date.

To the maximum extent possible, the renewal project should retain the same program design elements and continue with the same project sponsors, as documented in the prior HOPWA grant agreement approved by HUD. If a non-profit organization is being added as a new project sponsor, or if a sponsor’s legal status has changed, the organization must satisfy the nonprofit requirements established in the definition for an eligible nonprofit organization found in 24 CFR 574.3 and submit the required information in Section VIII.D. under the Organizational Capacity Narrative. HUD will consider the merits for changes in project sponsor arrangements, such asthe new sponsor evidences the capacity to enhance project operations or to improve responsiveness in the provision of housing and/or supportive services to program beneficiaries. Sufficient reasons for changing a project sponsor may include:

  • Need for a higher level of grant management skills
  • Need for a higher degree of financial management and efficiency
  • Desire to increase capacity for stronger program service delivery
  • The prior project sponsor is no longer in operation
  • Need for significant improvement in project staffing competency
  • Related unresolved monitoring or audit findings
  • The project sponsor merged with another entity
  • Loss of non-profit status

HUD must also be advised of any significant changes in staffing or other indications of changes to a project sponsor’s capacity to carry out program activities, including correcting any monitoring or audit findings on the organization’s activities. HUD reserves the right to reject a project involving a change in sponsors where an adequate justification is not provided, the capacity shown is too limited, or there are serious questions on the merits of this change.

Renewal projects must establish that PSH for eligible persons is the main focus of the grant. If you are proposing to continue some level of emergency shelter or transitional housing assistance, the plan must include linkages to the provision of PSH and show that the PSH activity is the primary activity of the grant. For eligible persons who will also receive supportive services, such as case management services, the program must be designed to enhance access to other needed services that are available in existing mainstream resources, including healthcare assistance, AIDS drug assistance under the Ryan White CARE Act, and other federal, state, local, and private resources. To the extent possible, HUD encourages renewal grantees to incorporate and identify the commitment of mainstream resources into their project plans to maximize the benefit of HOPWA grants.

  1. Ineligible Competitive Grants

If a HOPWA competitive grant has expired prior to FY2008, the grantee is not eligible for renewal under this notice but may submit an application under the Department’s SuperNOFA announcement. For the purposes of this Notice, the definition of an expired grant is one that has terminated prior to October 1, 2007, and for which no extension was requested by the grantee and approved by HUD. In addition, if a HOPWA competitive grant will expire after March 30, 2009, (i.e., more than six months into FY2009) it is expected that renewal funding for the PSH grant will be addressed in a future HOPWA notice and is not eligible for renewal under this notice.

In prior years, HUD solicited and approved HOPWA Special Projects of National Significance (SPNS) grants for special targeted housing activities. For example, in FY2005 HUD solicited and approved one-time funding for 17 transitional housing demonstration projects. These projects and others that are focused on the provision of emergency shelter or transitional housing activities are not eligible for renewal under the criteria of a PSH project but may compete for funding under the Department’s annual SuperNOFA as published each fiscal year.

In addition, grantees that operate permanent supportive housing grants are not eligible for renewal if any of the following applies:

  • Have been charged with an ongoing systemic violation of the Fair Housing Act; or
  • Are a defendant in a Fair Housing Act lawsuit filed by the Department of Justice alleging an ongoing pattern or practice of discrimination; or
  • Have received a letter of findings identifying ongoing systemic noncompliance under Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, or Section 109 of the Housing and Community Development Act of 1974, and the charge, lawsuit, or letter of findings referenced in subparagraphs (a), (b), or (c) above has not been resolved to HUD’s satisfaction before the application deadline, then you are ineligible. HUD will determine if actions to resolve the charge, lawsuit, or letter of findings taken before the application deadline are sufficient to resolve the matter. Examples of actions that would normally be considered sufficient to resolve the matter include, but are not limited to:
  1. A voluntary compliance agreement signed by all parties in response to a letter of findings;
  2. A HUD-approved conciliation agreement signed by all parties;
  3. A consent order or consent decree; or
  4. An issuance of a judicial ruling or a HUD Administrative Law Judge’s decision.
  1. Eligible Permanent Supportive Housing Activities

Housing programs seeking renewal funding must provide on-going forms of housing support over three years, such as Tenant-Based Rental Assistance (TBRA) and Short-Term Rent, Mortgage, and Utility (STRMU) payments. These supportive housing activities establish or maintain stable permanent housing, reduce the risks of homelessness, and improve access to healthcare and other needed support. PSH activities may also provide operating costs for permanent housing facilities and costs for leasing of permanent housing facilities.

Related project costs are also eligible to assist beneficiaries of these housing projects, such as costs for supportive services and housing information services. Housing information services and permanent housing placement services may also be used to assist beneficiaries in moving to other permanent housing, such as outplacement to independent living arrangements, homeownership, or other on-going forms of housing assistancethat do not involve HOPWA funding. In prior years, some housing placement costs were included in other budget line items (BLI). These costs can be identified, deducted from their current BLI, and realigned to the permanent housing placementBLI.

Eligible activities with their standards and limitations may be found in the HOPWA regulations at 24 CFR 574.300-574.340. A copy of the regulations may be downloaded from

VI. Ineligible Activities

In applying for renewal funding the following activities are ineligible:

  • Acquisition, new construction, rehabilitation, or costs involving new housing facility sites, such as operating costs or leasing of new housing facilities and community residences, for the purposes of expanding existing operations to additional new locations are ineligible. However, this does not preclude the leasing of individual housing units for the purpose of continuing TBRA or master leasing assistance nor does this apply to an existing facility in which the lease expires and the facility operations and activities must be relocated to a new site. Applicants are cautioned that an environmental review with regard to any new site must be completed in accordance with 24 CFR 574.260 before a lease or other commitment is made with respect to the new site. If you are interested in undertaking additional capital development activities, or in significantly expanding your HOPWA activities beyond those allowed in this Notice, you should consider competing for funding under the annual SuperNOFA competitive process or under other appropriate programs.
  • Resource identification activities to establish, coordinate, and develop housing assistance resources, and/or technical assistance for community residence activities are ineligible for renewal funding.
  • An additional BLI for data collection on project outcomes is ineligible. Collecting performance data and reporting to HUD are required as a central grants management function and is an eligible administrative cost, subject to statutory limitations.
  • Healthcare costs, such as costs for medications, are ineligible.
  • HOPWA funds cannot be used for personal items such as:
  • clothing;
  • property taxes and condominium fees;
  • furniture;
  • grooming;
  • personal vehicle maintenance and repairs;
  • financial assistance and consumer credit payments;
  • entertainment activities;
  • pets; and
  • other non-housing-related costs.

Note: those funds currently awarded to anyof the nonrenewable BLIs listed above are not available for movement into BLIs that are eligible for renewal in an effort to expand activities beyond the currently approved levels.

VII. Funding Restrictions

Limitations on Maximum Grant Amounts

Under this notice, HUD will evaluate the renewal eligibility of your HOPWA project’s current effort. If you wish to modify and/or expand activities beyond the scope of your currently approved and executed grant agreement, you should consider seeking other available funding under HUD’s SuperNOFA grant announcement or through the availability of HOPWA formula funding from local /state allocations, or from other funding sources. A renewal grant can be funded up to 100 percent of current HUD-approved (BLI) funding levels for program activities (with administrative costs determined from the approved totals). HUD reserves the right to decrease BLIs if it is determined that the number of persons/units assisted (housing outputs) is substantially less than the amount agreed upon in the current executed grant agreement.

As justified, an applicant may request to increase TBRA, STRMU, operating costs, and leasing BLIs if there is evidence of extenuating circumstancesaffecting the costs for continuing the currently approved level of service delivery. This evidence may include information showing an increase in housing costs due to a change in the fair market rent oran increase in housing facility operational costs that require commitment of additional HOPWA resources to continue housing support for current beneficiaries, to maintain the housing facility or program, or to assist with related facility or unit damage in an area covered by a Presidentially declared natural disaster. The applicant is required to submit a detailed narrative that justifies the funding increase requests. HUD reserves the right to negotiate with the grantee and to adjust requests under this paragraph to address the circumstance and project purposes. Please note that a requested increase in any budget line item in order to increase the approved output level of an activity is not an adequate justification.